C.R.Viswanath HUF, CHENNAI V. ITO, CHENNAI

ITA 667/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6260 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-08-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 20-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASISH TRIPATHY
• Assessee Lawyers: T N SEETHARAMAN
• Keywords: Capital asset
• Section: 143(3); 54F; 54; 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , , ' # BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.667/MDS/2017 & '& / ASSESSMENT YEAR : 2012-13 SHRI C.R. VISWANATH HUF, C/O SHRI T.N. SEETHARAMAN, ADVOCATE, # 384 (OLD NO.196), LLOYDS ROAD, CHENNAI - 600 086. PAN : AAAHC 1724 R V. THE INCOME TAX OFFICER, NON CORPORATE WARD 7(4), CHENNAI. ()*/ APPELLANT) (+,)*/ RESPONDENT) )* - . / APPELLANT BY : SHRI T.N. SEETHARAMAN, ADVOCATE +,)* - . / RESPONDENT BY : SHRI ASISH TRIPATHY, JCIT / - 0' / DATE OF HEARING : 08.08.2017 12' - 0' / DATE OF PRONOUNCEMENT : 06.09.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -7, CHENNA I, DATED 30.01.2017 AND PERTAINS TO ASSESSMENT YEAR 2012-13. 2 I.T.A. NO.667/MDS/17 2. SHRI T.N. SEETHARAMAN, THE LD.COUNSEL FOR THE AS SESSEE, SUBMITTED THAT THE ASSESSING OFFICER MADE ADDITION TOWARDS CAPITAL GAIN ON SALE OF A PROPERTY BY THE ASSESSEE AT MYLAP ORE TO THE EXTENT OF ` 1,13,96,715/- WHILE COMPLETING THE ASSESSMENT UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE A CT'). ACCORDING TO THE LD. COUNSEL, THE PROPERTY AT MYLAPORE WAS SOLD BY MEANS OF REGISTERED SALE DEED DATED 27.06.2011 FOR A TOTAL C ONSIDERATION OF ` 1,14,76,000/-. THE ASSESSEE HAS ALSO CLAIMED DEDUCT ION UNDER SECTION 54F OF THE ACT. IN FACT, THE ASSESSEE HAS PURCHASED A FLAT AND ALSO PAID ` 1,15,00,000/- TO SHRI G. BALARAJAN FOR PURCHASE OF FLAT. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE ASSESSEE HAS INVESTED IN A NEW PROPERTY OVER AND ABOVE THE CAPIT AL GAIN. MERELY BECAUSE THE PROPERTY WAS NOT REGISTERED, ACCORDING TO THE LD. COUNSEL, IT CANNOT BE SAID THAT THE ASSESSEE IS NOT ENTITLED FOR EXEMPTION UNDER SECTION 54F OF THE ACT. 3. REFERRING TO THE ASSESSMENT ORDER, THE LD.COUNSE L FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS PAID ` 1,15,00,000/- ON THE BASIS OF AGREEMENT ENTERED FOR PURCHASE OF FLAT WITH SHRI G. BALARAJAN, WHO IS A FLAT PROMOTER. IN FACT, SHRI B ALARAJAN ACKNOWLEDGED THE RECEIPT OF ` 1,15,00,000/-. ACCORDING TO THE LD. 3 I.T.A. NO.667/MDS/17 COUNSEL, THE ASSESSING OFFICER, HOWEVER, REJECTED T HE CLAIM OF THE ASSESSEE UNDER SECTION 54 OF THE ACT ON THE GROUND THAT THE DOCUMENT WAS NOT REGISTERED IN THE NAME OF THE ASSE SSEE. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE FILED A RECTIFICATION PETITION UNDER SECTION 154 OF THE ACT CLAIMING THAT THE ENTIRE CAPITAL GAIN WAS INVESTED IN PURCHASING A NEW PROPERTY, THE REFORE, THE ASSESSEE IS ENTITLED FOR EXEMPTION UNDER SECTION 54 OF THE ACT. THE ASSESSING OFFICER REJECTED THE RECTIFICATION PETITI ON FILED BY THE ASSESSEE UNDER SECTION 154 OF THE ACT ON THE GROUND THAT THERE IS NO ERROR IN THE ASSESSMENT ORDER. ACCORDING TO THE LD. COUNSEL, SINCE THE INVESTMENT WAS MADE WITHIN THE PERIOD PRO VIDED FOR FILING OF THE RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 54 OF THE ACT. 4. ON THE CONTRARY, SHRI ASISH TRIPATHY, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT EVEN THOUGH THE ASSE SSEE PAID ` 1,15,00,000/- TO THE FLAT PROMOTER FOR PURCHASING A NEW HOUSE PROPERTY, THE FLAT WAS NOT REGISTERED IN HIS NAME T ILL 21.03.2015. THEREFORE, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER FOUND THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION UND ER SECTION 54 OF THE ACT. THE ASSESSING OFFICER ALSO REJECTED THE R ECTIFICATION PETITION 4 I.T.A. NO.667/MDS/17 FILED BY THE ASSESSEE UNDER SECTION 154 OF THE ACT ON THE GROUND THAT THERE IS NO ERROR. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE SOLD HIS PROPERTY FOR A T OTAL SALE CONSIDERATION OF ` 1,14,76,000/- BY MEANS OF REGISTERED SALE DEED DATED 27.06.2011. THE LONG TERM CAPITAL GAIN COMPU TED IS ` 1,13,96,715/-. IT IS NOT IN DISPUTE THAT THE ASSES SEE HAS PAID ` 1,15,00,000/- TO THE FLAT PROMOTER SHRI G. BALARAJA N. 6. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF SECTION 54 OF THE ACT. SECTION 54 OF THE ACT CLEARLY SAYS THA T WHEN THE ASSESSEE TRANSFERRED A LONG TERM CAPITAL ASSET AND CONSTRUCTED ONE RESIDENTIAL HOUSE IN INDIA, THEN THE ASSESSEE IS EL IGIBLE FOR DEDUCTION UNDER SECTION 54 OF THE ACT. IN THIS CASE, THE ASS ESSEE ENTERED INTO AN AGREEMENT FOR PURCHASE OF FLAT FROM SHRI BALARAJ AN, WHO IS A FLAT PROMOTER. THE ASSESSEE HAS ALSO PAID ` 1,15,00,000/-. MERELY BECAUSE THE ASSESSEE COULD NOT GET THE REGISTERED S ALE DEED BEFORE THE DUE DATE FOR FILING OF RETURN OF INCOME UNDER S ECTION 139(1) OF THE ACT, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IT CANNOT BE A 5 I.T.A. NO.667/MDS/17 REASON TO REJECT THE CLAIM OF THE ASSESSEE UNDER SE CTION 54 OF THE ACT. THE FACT THAT THE ASSESSEE HAS PAID ` 1,15,00,000/- EVEN THOUGH THE CAPITAL GAIN WAS ` 1,13,96,715/- WAS BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER DURING THE ASSESSME NT PROCEEDING UNDER SECTION 143(3) OF THE ACT. THE ASSESSING OFF ICER HAS TAKEN A VIEW THAT THE REGISTERED SALE DEED WAS NOT COMPLETE D, THEREFORE, THE ERROR POINTED OUT BY THE ASSESSEE BY MEANS OF PETIT ION UNDER SECTION 154 OF THE ACT CANNOT BE ENTERTAINED. 7. SINCE THE ASSESSEE HAS PAID ENTIRE CAPITAL GAIN TO THE FLAT PROMOTER FOR PURCHASING THE FLAT AND THE FLAT WAS U NDER CONSTRUCTION, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 54 OF THE ACT. IN OTHER WORDS, THE ASSESSEE UTILIZED THE ENTIRE CAPITAL GAIN FOR C ONSTRUCTION OF NEW RESIDENTIAL HOUSE. THEREFORE, WE ARE UNABLE TO UPH OLD THE ORDERS OF BOTH THE AUTHORITIES BELOW. ACCORDINGLY, THE ORDER S OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ASSESSING O FFICER IS DIRECTED TO GRANT DEDUCTION UNDER SECTION 54 OF THE ACT. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 6 I.T.A. NO.667/MDS/17 ORDER PRONOUNCED ON 6 TH SEPTEMBER, 2017 AT CHENNAI. SD/- SD/- ( ) ( . . . ) (S. JAYARAMAN) (N.R.S. GANESAN) ' / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 6 TH SEPTEMBER, 2017. KRI. - +056 76'0 /COPY TO: 1. )* /APPELLANT 2. +,)* /RESPONDENT 3. / 80 () /CIT(A)-7, CHENNAI 4. PRINCIPAL CIT- 2, CHENNAI 5. 69 +0 /DR 6. :& ; /GF.